CBN survey predicts stable naira, lower interest rates.
The naira is anticipated to maintain relative stability over the upcoming six months, while borrowing rates are projected to decrease during the same timeframe, as indicated by a Business Expectation Survey report published by the Central Bank of Nigeria.
The report mentioned that the naira is expected to rise from its current index of 28.8 points to 42.2 points by May 2026, continuing a period of remarkable stability that commenced earlier this year.
According to the report, borrowing rates are predicted to decline from 15.4 index points to 11.7 points in the next six months, reflecting the ongoing decrease in inflation, which remains a crucial factor in monetary policy adjustments.
"Survey participants foresee the Naira's exchange rate against the US Dollar to steadily improve throughout the review periods, as suggested by the favorable indices. Additionally, they predict a sustained positive outlook for borrowing rates in the same timeframe," stated the monthly BES report, which surveyed 1,900 businesses across the nation.
The Nigerian naira is currently experiencing an extended phase of stability, a situation deemed unusual in recent years after the currency depreciated by approximately 41 percent last year due to the unification of the exchange rate and the subsequent floating of the naira to enhance its market-driven nature.
Although the currency is presently facing slight depreciation attributed to heightened foreign exchange demand from local companies fulfilling import requirements during the festive season, experts expect the naira to remain stable.
They credit this outlook to the Central Bank of Nigeria's strategic interventions designed to manage excessive fluctuations and continued investments from foreign portfolio investors.
In attempts to control persistently elevated inflation, monetary authorities have kept the benchmark interest rates steady since the previous year, only slightly lowering borrowing rates by half a basis point at the last Monetary Policy Committee meeting for 2025.
This adjustment positioned Nigeria's monetary policy rate at 27 percent, even as asymmetric corridors were significantly modified to facilitate credit flow.
With inflation expected to drop to single-digit levels next year from the 14.45 percent recorded in November, analysts believe that policymakers may soon have justifiable grounds to begin reducing rates and fostering increased credit access for businesses currently under strain.
The report also pointed out insecurity and multiple high taxes as the primary challenges faced by businesses in Africa's most populous nation, despite companies still confronting double-digit inflation and fluctuations in foreign exchange rates.
"Survey participants indicated Insecurity (70.1), High/Multiple Taxes (69.7), Insufficient Power Supply (69.3), High Interest Rate (67.2), and Financial Problems (64.7) as the five leading business challenges in November 2025, emphasizing factors that directly influence operational stability and profitability," the report observed.
"At the lower end of the top ten constraints were Poor Infrastructure (57.7) and Unfavorable Political Climate (57.7). This indicates that business constraints were more centered on financial issues rather than political factors during the review period."
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